Structure and function of the retina and pigment epithelium under normal and light-exposed conditions have been studied by electron microscopy. The following results were obtained: 1.) The natural appearance of the dense microvilli of the pigment epithelium and their close relationship with the photoreceptor outer segments have been clearly demonstrated by scanning electron microscopy. 2.) Phagocytic activity of the pigment epithelium has been studied by injecting latex spheres in various sizes into the subretinal space. Larger particles (1.0 micrometer) are more readily phagocytosed by the cell than smaller (0.1 micrometer) spheres. 3.) Fine structure of the pigment epithelium of various experimental animals has been studied and it was found that the cell shows a considerable species difference. 4.) Synaptic organs of the photoreceptor cells show marked cytologic changes by light exposure. The cone cells of the albino rat are relatively resistant to light damage. 5.) Photoreceptor cells of the developing retina continue their outer segment production under bright light for more than two weeks. 6.) Electronic flash light damages the plasma membrane of the outer segment and the mildly damaged cells eventually undergo degeneration.